Will The Revised USCIS Q&A On Establishing The Employer-Employee Relationship In H-1B Petitions Save Staffing Companies?

Since the issuance of the January 8,
2010 guidance memorandum by Donald Neufeld, concerning the employer-employee
relationship in H-1B petitions (Neufeld
Memo), especially when an employer places
an H-1B worker at a third party client site, workers at IT consulting and
staffing companies have been the most adversely impacted. Indeed, it seems that the Neufeld Memo was
designed to kill the staffing company.

The adverse effects of the Neufeld Memo
have been felt most keenly by Indian nationals on H-1B visas who make up most
of the workforce at such companies. This
legitimate IT business model, which has been readily embraced by US
corporations, is associated with
a distasteful term in immigration parlance, namely the “job shop,” whose
presence has become ubiquitous with Indian beneficiaries of employment visa
petitions. The heightened scrutiny, often leading to an arbitrary
denial, is exercised even if the USCIS has approved the H-1B petition
previously on the exact same facts. Most problematically, H-1B visa applicants
face unreasonable and arbitrary treatment at US Consulates in India, and are
subject to unnecessary demands for the same documentation even after they were
submitted to the USCIS, resulting in denials or recommendations for revocation
of their petitions. Most Indian H-1B visa holders are fearful of travelling to
India presently out of fear that they will be denied a visa based on an
approved petition. CBP at ports of
entry has also exercised this subjective scrutiny over Indian H-1B entrants in
the IT consulting field at ports of entry.

Q5:
Am I required to submit a letter or other documentation from the end-client
that identifies the beneficiary to demonstrate that a valid employer-employee
relationship will exist between the petitioner and beneficiary if the
beneficiary will perform services at an end-client/third-party location?

A5: No. While
documents from the end-client may help USCIS determine whether a valid
employer-employee relationship will exist, this type of documentation is not
required. You may submit a combination of any documents to establish, by a
preponderance of the evidence, that the required relationship will exist. The
types of evidence listed in the memorandum are not exhaustive. Adjudicators
will review and weigh all the evidence submitted to determine whether you have
met your burden in establishing that a qualifying employer-employee
relationship will exist.

Q13: The
memorandum provides an example of when a computer consulting company had not
established a valid employer-employee relationship. Are there any situations in
which a consulting company or a staffing company would be able to establish a
valid employer-employee relationship?

A13: Yes. A consulting company or
staffing company may be able to establish that a valid employer-employee
relationship will exist, including where the beneficiary will be working at a
third-party worksite, if the petitioning consulting or staffing company can
demonstrate by a preponderance of the evidence that it has the right to control
the work of the beneficiary. Relevant factors include, but are not limited to,
whether the petitioner will pay the beneficiary’s salary; whether the
petitioner will determine the beneficiary’s location and relocation assignments
(i.e. where the beneficiary is to report to work); and whether the petitioner
will perform supervisory duties such as conducting performance reviews,
training, and counseling for the beneficiary. The memorandum provides a
non-exhaustive list of types of evidence that could demonstrate an
employer-employee relationship.

It is heartening to know that the failure to submit direct
document from the end client will not be fatal. It is often times very
difficult to obtain such a letter from the end client, especially when there
are multi-vendor arrangements between the end client and the H-1B petitioner. Moreover,
the end client may not want to be involved in any way in the visa petitioning
process, without realizing that its reluctance to submit a letter can result in
a denial of the H-1B petition and deprive it of a crucial worker for its project.
The revised Q & A states that the petitioner “may submit a combination of
any documents to establish, by a preponderance of the evidence, that the
required [employer-employee] relationship will exist.” It is hoped that USCIS
will not willfully ignore this guidance. Also, consuls should note that the
absence of direct documentation from the end client should not cause them to
refuse the H-1B visa, and recommend to the USCIS that the H-1B petition be
revoked.

Also welcome is the absence of the pejorative term “job
shop” in the answer to Question 13, and the fact that the Q&A states that a
consulting or staffing company can still demonstrate through the preponderance
of the evidence that it has the right to control the work of the beneficiary,
even though he or she may be at a third party client site. It also provides
helpful tips on how the consulting or staffing firm can demonstrate a right of
control through conducting performance reviews, training and counseling for the
beneficiary. While the USCIS would doubtless prefer the daily assertion of
actual control by the H-1B petitioner even though it has professed that the
H-1B employer only exercise the right of control, it is encouraging to note
that this latest guidance does indeed provide concrete examples that are truly
indicative of “the right to control.” It would appear that, so long as the
indicia of ultimate supervision are present, the absence of day-to-day review
will not be fatal. Such flexibility will
not only restore a utilitarian suppleness to the H-1B but to other
non-immigrant visa categories, notably the off-site L-1B intra-company
transferee, where artificial notions of rigid control have also proved
consistently at variance with contemporary business practice.

Beyond that, while the H-1B petitioner must always retain
primary control, Neufeld redux does not demand total or exclusive control. This
could mean, for example, that input from end users as part of performance
reviews would not only be tolerated but sanctioned. While the selection of locations and
assignments remain the province of the H-1B petitioner, as they should, there
is noreason why daily on-the-job consultations
with end user management cannot take place consistent with retention of H-1B
status. A distinction between first and last decisions as compared to every day
tactical adjustments is good news for an economy still struggling to get back
on its feet. Though this may not have been their intent, the drafters of this
update have brought the Neufeld memorandum closer to what Judge Kessler had in
mind when she dismissed the Broadgate
complaint:

To
summarize, the Court concludes the Memorandum establishes interpretive
guidelines for the implementation of the Regulation, and does not bind USCIS
adjudicators in their determinations of Plaintiffs’ H-1B visa applications

This latest guidance represents an unspoken but nonetheless
enlightened attempt to align the Neufeld Memorandum with the way America works.
If followed, it can help save H-1B petition requests from impending doom. The
only remaining issue is whether this revised Q&A will be seriously followed
by the USCIS officers, and in turn, by the US Consulates. Regardless, an H-1B petitioner whose business model
involves placing H-1B workers at third party client sites should actively rely
on this revised Q&A when filing H-1B petitions or when responding to
requests for evidence to assert its right of control over the beneficiary.

There is a larger reason why those of us who have so
strenuously attacked the Neufeld Memorandum should welcome this revision. The
absence of guidance is the lawyer’s worst nightmare. Without knowing how the
game is played, the lawyer does not know when to advance or when to retreat. He
or she is prone to putting in too much or not enough, placing undue emphasis on
what is tangential while glossing over the truly essential. Some cases take an
excessive amount of time to prepare while others are filed prematurely. Law
becomes a high stakes poker game, justice by ambush. The USCIS adjudicator is
also at sea. Uncertain what standards to employ, frustrated by nagging suspicion that agile advocacy by an
unscrupulous bar will win benefits for clients who do not deserve them, the
line analyst at the Vermont or California Service Center faced with a subtle
H-1B fact pattern looks in vain to Washington for clarity that does not come.
The process becomes complex, complicated and expensive. Conflict replaces
cooperation leading to litigation and micromanagement. There seems no exit.
When nothing is certain, almost anything can happen.

That is where the Neufeld Memorandum and the August 2011
guidance left us (although the earlier guidance consistent with DHS’s policy to
welcome entrepreneurs clarified
how an owner of a company could get an H-1B visa). Not really knowing how
the USCIS would interpret the third party placement of an H-1B temporary
worker, we were left with a Hobson’s choice between bedlam and litigation. The
only thing that was certain was the absence of certainty itself. That is why
this most recent Neufeld Q&A is so welcome for it has within it the
potential to restore clarity and stability to a singularly important question
of law in the increasingly contentious H-1B debate at a time when both
qualities were singularly lacking.Rhetoric is
not reality, however, and the possibility that skeptical USCIS adjudicators
will simply ignore this most recent guidance remains a disturbing possibility.
We all know from bitter experience the gap between promise and performance.
Good intentions in Washington DC can be frustrated quite well by sustained
resistance in the trenches. If the wisdom of good men and women will prevail,
this will not happen. Hopefully, the deliberate
deployment and informed application of this newly minted wisdom will turn the
Neufeld Memo from a symbol of intransigence into a tool for nuanced adjudication. That will
deserve the genuine approbation of all those who doubtless will wonder why the
USCIS did not think of this earlier.

Note: We thank ILW.COM for making August 2, 2011 USCIS guidance available to us.

This article originally appeared on the Insightful Immigration Blog on March 18, 2012 at blog.cyrusmehta.com

About The Author

Gary Endelman is a Senior Counsel at FosterQuan, Houston, TX. His practice includes I-9
compliance and audits, E-Verify compliance,
immigration issues related to mergers and
acquisitions, employment-based nonimmigrant visas,
B-1 OCS, permanent residence petitions for ability, outstanding researchers, PERM labor certification; naturalization, derivation and
transmission of U.S. citizenship. Mr. Endelman
graduated with a B.A. in History from the University
of Virginia, a Ph.D. in United States History from the
University of Delaware, and a J.D. from the
University of Houston. From 1985 to 1995, he worked
at one of the largest immigration firms in the country.
From 1995 to 2011, he worked as the in-house
immigration counsel for BP America Inc., a
multinational energy company ranked as one of the
top 5 largest companies in the world. Mr. Endelman is
board certified in Immigration and Nationality Law by
the State Bar of Texas, Board of Legal Specialization.
He is a frequent national speaker and writer on
immigration related topics including several columns
and blogs on immigration law. He served as a senior
editor of the national conference handbook published
by AILA for ten years. In July 2005, Mr. Endelman
testified before the United States Senate Judiciary
Committee on comprehensive immigration reform.
Please contact Gary Endelman at
gendelman@fosterquan.com. The views expressed by
Mr. Endelman in this article are his personally and not
those of FosterQuan.

Cyrus D.Mehta, a graduate of Cambridge
University and Columbia Law School, is the
Managing Member of Cyrus D. Mehta & Associates,
PLLC in New York City, www.cyrusmehta.com, and
a member of the Alliance of Business Immigration
Lawyers (ABIL). He is listed as a most highly
regarded individual by International Who’s Who of
Corporate Immigration Lawyers 2011 and is ranked
by Chambers USA 2011. Mr. Mehta is the Vice Chair
of the American Immigration Lawyers Association’s
(AILA) Ethics Committee and past Chair of AILA’s
Pro Bono Committee. He is a former Chair of the
Board of Trustees of the American Immigration
Council (2004–06). He was also Secretary (2003–07)
and Chair of the Committee on Immigration and
Nationality Law (2000–03) of the New York City Bar.
He is a frequent speaker and writer on various
immigration-related issues, and is also an adjunct
associate professor of Law at Brooklyn Law School,
where he teaches a course entitled “Immigration and
Work.” He received the AILA 2011 Michael Maggio
Memorial Award for his outstanding efforts in
providing pro bono representation in the immigration
field.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.